A report by the uniBank’s Official Administrator, KPMG, has disclosed that shareholders of defunct uniBank advanced loans amounting to GHS3.7 billion to themselves, while, in total, the related parties of the bank and its shareholders owed GHS5.6 billion minus interest
As part of plans to repay the GHS3.7 billion loan advanced to them and the GHS5.6 billion owed by the related parties, the shareholders proposed the following:
- Injection of GH¢1 billion not later than mid-July 2018
- Injection of GH¢1 billion by end of September 2018
- Assignment of the holding company’s (HODA) assets amounting to GH¢4.1 billion to the Bank.
KPMG said in the report that: “The nature of the shareholders’ proposal in response to Official Administrator’s demand notice for payment of GH¢5.6 billion (excluding interests) owed by related parties” would have been in “cash, buildings and others”, even though it admitted that: “The deliverability, credibility and achievability of shareholders’ proposal has not been tested”.
How would the Shareholders’ loan repayment proposal have impacted capital and liquidity?
uniBank would have had
It said liquidity of the bank would have improved in the short-term with the cash injection of GHS2 billion by September 2018, albeit medium-term liquidity challenges would have remained.
The report also said as of 31 May 2018, the liabilities of the bank exceeded assets by 284%, with
It said there was “significant deterioration in asset quality” of uniBank.
The report noted that “deficiencies in internal governance and bank-wide arrangements undermined the viability” of uniBank.
It said uniBank’s earning capacity continued to “deteriorate due to low returns on RWAs and a significant operating cost burden”.
As of the period under review, uniBank’s “cost-income ratio was -113%”.
The bank’s liquid assets, as of the time, according to KPMG, represent 2% of total liabilities.
According to the document, uniBank prior to the revocation of its license had 811 permanent staff, 64 contract
That was not all, the bank also had related entities whose staff depended on it for financial support.
In the breakdown, the permanent staff of the related entities were 1,284, contract staff of 244, outsourced staff 200 and 20 National Service personnel.
In total, the employees that depended on the financials of the bank were 3,692, even though the bank’s output was less, compared to the total staff strength.
It is anticipated that most of these employees have been affected by the revocation of the license of the bank, as they no longer work for the bank.